Correlation Between Payment Financial and Mobile Max

Can any of the company-specific risk be diversified away by investing in both Payment Financial and Mobile Max at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Payment Financial and Mobile Max into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Payment Financial Technologies and Mobile Max M, you can compare the effects of market volatilities on Payment Financial and Mobile Max and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Payment Financial with a short position of Mobile Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and Mobile Max.

Diversification Opportunities for Payment Financial and Mobile Max

-0.71

Correlation Coefficient

Payment Financial  Mobile Max

Pay attention - limited upside

The 3 months correlation between Payment and Mobile is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies and Mobile Max M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Max M and Payment Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Payment Financial Technologies are associated (or correlated) with Mobile Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Max M has no effect on the direction of Payment Financial i.e., Payment Financial and Mobile Max go up and down completely randomly.

Pair Corralation between Payment Financial and Mobile Max

Assuming the 90 days trading horizon Payment Financial Technologies is expected to generate 1.16 times more return on investment than Mobile Max. However, Payment Financial is 1.16 times more volatile than Mobile Max M. It trades about 0.14 of its potential returns per unit of risk. Mobile Max M is currently generating about -0.08 per unit of risk. If you would invest  26,409  in Payment Financial Technologies on September 27, 2024 and sell it today you would earn a total of  5,991  from holding Payment Financial Technologies or generate 22.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Payment Financial Technologies  vs.  Mobile Max M

Payment Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Payment Financial Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Payment Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Mobile Max M

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile Max M has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Payment Financial and Mobile Max

The main advantage of trading using opposite Payment Financial and Mobile Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payment Financial position performs unexpectedly, Mobile Max can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mobile Max will offset losses from the drop in Mobile Max's long position.

The idea behind Payment Financial Technologies and Mobile Max M pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.